Megaflow are a pain in the arse for that very reason. All the ones I've seen in New build houses are just too small, 150 liters is not enough. I would normally fit a 210ltr in an average family home as a minimum. 250 if space allows

I've had one for 10 years (I assume that's what it is as it has a pressure gauge ) we also have a normal hot water tank in airing cupboard and with the pipe work it's warm enough to keep towels, sheets etc warm and dry. As noted its not so good for drying damp stuff, we hand that elsewhere.

Yes Rachel, it should be a relatively straight forward job to swap them. Unvented cylinders can be located anywhere, however they do need a drain pipe to the outside ideally. In theory it should never, ever be used, but it's a safety feature in case the pressure or temperature gets too high

I had a 250 ltr one fitted in the loft when building an extension, requires a 22mm mains water feed and a 22mm overflow to ground level ( so you don't squirt hot water from above), its very well insulated so doesn't give off any waste heat however I would think that if you leave the pipework in the airing cupboard uninsulated it should do the business

It's normal, that's just the pressure release valve doing its job. Without the air bubble, the water pressure can build up as it heats up. Too high and the valve should release. You should check the valve manually every few months, just give it a quarter turn and a bit a water will be released. If you don't do this regularly, they can seize. Should be 2 on there, but some are combined into 1